Chinese Firms' Foreign Oil Production Mostly Sold Abroad, Official Says

Chinese companies' foreign ventures produced 90 million tons of oil last year and more than 90 percent of that was sold abroad, a government official said on December 3. The statement by Liu Qi, deputy director of National Energy Administration, was the first time the government has revealed the figure and it comes in response to criticisms that China was locking up large amounts of oil around the world.

Overseas oil production by Chinese firms increased the global supply, Liu said, and this played an important role in stabilizing prices on the international market. Fu Chengyu, chairman of China Petrochemical Corp. (Sinopec), said Chinese oil companies' were motivated by profit. "The oil market is an open market," Fu said. "You can buy oil if you have money. So the objective of our investment in foreign countries is to make money." Fu added that it was common practice in the industry for companies to invest in other markets, and no single firm on the world large was limited to one place.

The overseas production of China National Offshore Oil Corp. (CNOOC) is all sold in foreign markets. Sinopec's foreign oil fields yield about 23 million tons every year. The company had the right to sell 12 million tons, and part of that was sold locally. The Big Three hold most of China's foreign oil assets. China National Petroleum Corp. (CNPC) produces 58 percent of the total, Sinopec 26 percent and CNOOC 12 percent, according to data from the CNPC Research Institute of Economics and Technology. Citic Resources Holdings Ltd. and ZhenHua Oil Co. Ltd., both branches of state-owned companies, produce 1 percent each.